Court upholds company’s win in parental leave dispute

Iceland’s Court of Appeal has upheld a ruling that a company was not liable for damages or compensation to a woman who did not return to work after parental leave and a period of unpaid leave, mbl.is reported.

The woman sought nearly 5.5 million króna for financial losses and a further three million króna in compensation for distress. She argued that the company had unlawfully dismissed her. The courts found instead that she had ended her employment by not returning to work.

After giving birth in 2023, she took seven and a half months of parental leave. She said she had previously reached an oral agreement with the company to be away for longer, but the Reykjavík District Court found that this had not been proved. Because of family circumstances and a lack of childcare, she later requested unpaid leave until autumn 2024. The company declined to grant leave for that long but offered about five additional months.

The woman said she could not return until her child had a place at a preschool. Her union helped with discussions, but the parties did not agree on a longer leave period or a severance deal. The District Court found that the company had met its obligations under gender equality laws by offering the additional unpaid leave. It also found that she had not specifically asked to work part-time and had repeatedly said she could not return before autumn.

The courts rejected her claims of sex discrimination and breaches of laws on gender equality and parental leave. Her job remained available after the additional leave offered by the company. She did not return and later said goodbye to colleagues on the employees’ Facebook page, so the courts concluded that she had ended the employment relationship herself.

The District Court also found that her financial losses were not proved. Tax records showed that she had received higher earnings from a company owned by her father than from her former employer. She said she had not worked for those payments and would have to repay them, but the court found those claims unsubstantiated. The Court of Appeal said a statement from her father that his company intended to reclaim the wages did not affect the outcome.